Federal prosecutors in Brazil have announced they will chase BHP Billiton Limited (ASX: BHP) and Vale, as well as their subsidiary Samarco, for a total of 155 billion reals, or roughly $58.2 billion, in response to the tragic disaster in Brazil last year.

The incident occurred at the Samarco iron ore operation (in Minas Gerais, Brazil) in November last year when a tailings dam collapsed killing 19 people. In addition, it also caused environmental damage on an almost unprecedented scale, including the pollution of a major river and the destruction of several villages – some of which were dozens of miles away from the dam itself.

As is being reported by The ABC, the civil action being referred to is separate from the lawsuit that Samarco and its joint owners – BHP Billiton and Vale – settled with the Brazilian government in March which cost them roughly 20 billion reals, or just over $7.5 billion.

The report also noted that the new 359-page lawsuit is also being filed against the two states impacted by the spill as well as the federal government. This is likely due to any allegations of negligence on their behalf for allowing the tragedy to occur.

While there is never a good time to be hit with a $58.2 billion lawsuit, the timing is even worse for BHP Billiton, as it faces the prospect of a prolonged downturn in commodity prices.

Although both iron ore and oil – which are BHP’s two most important markets – have recovered in recent months, they remain considerably lower compared to their highs in recent years. What’s more, many economists have expressed their doubts regarding the sustainability of those prices with the prospect of another sharp fall in the second-half of this year.

As would be expected to happen under such circumstances, BHP’s share price has been hammered today. The impact of the claim has sent BHP’s shares crashing more than 7% to a low of $19.12. That was perhaps exacerbated by a 4.3% decline in the iron ore price overnight, according to The Metal Bulletin, with Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) shares also trading 3.8% and 4.8% lower, respectively.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.